Competition in railway monopolies

The transformation of railways from monopolies to markets open for internal competition is described and explained in a theoretical framework, and a m odel for the evaluation of the transformation's impact on efficiency is dev eloped. Using the model in an empirical study of the Swedish railway sector , it is found that external competitive pressure is strong in most supply s egments and, focusing on loss of scale advantages, that the transformation will result in significant costs. Comparing the potential for gains by comp etition against the costs, it is concluded that increased efficiency by int ernal competition only seems possible to achieve for two train products: do mestic combined transport and dedicated trains (both freight services). (C) 1998 Elsevier Science Ltd. All rights reserved.